DESCRIPTION: The division provides loans or loan guarantees to qualified Navajo individuals or Navajo-owned businesses. The program is intended to foster the establishment of new businesses or the expansion of existing businesses within the Navajo Nation's territorial jurisdiction.

ELIGIBLE USES:

Funds can be used for any business purpose including, but not limited to: the purchase of equipment, working capital, the construction of permanent facilities and the purchase of existing business interests, excluding goodwill.

PROGRAM/LOAN STRUCTURE:

Maximum Program Benefits: Minimum loan is $10,000; maximum loan is $150,000 for new businesses and 10,000 to $200,000 for expanding business. Loan not to exceed 90% of purchase price of assets, or 95% of value of permanent improvements on a reservation site.

Equity: Requires 10% equity from borrowers. Those unable to meet this requirement can apply for financial assistance from the Bureau of Indian Affairs.

Maturities: Depends on how the funds will be used:

Working capital: not to exceed 48 months;

Working capital for wages: not to exceed 12 months;

Equipment: useful life, not to exceed 72 months;

Permanent improvements: useful life, up to 204 months;

Existing business interests: not to exceed 84 months; and

The term of any loan is not to exceed two-thirds of the remainder of any land lease. If loan funds are to be used for more than one of the above categories, then the maximum term will be a weighted average based on the amount for each use.

Rates: Minimum of 1% above Wall Street Journal prime rate.

QUALIFICATION CRITERIA/COMMENTS:

Must be an enrolled member of the Navajo Tribe.

Partnerships, corporations or forms other than sole proprietorships must be 100% Navajo-owned and ?controlled.

The business venture must be located within the territorial jurisdiction of the Navajo Nation.